Quarterly Monetary Policy Report, 2022/IV

The information analysed in this Report shows that inflationary pressures are hiking and their base expanding. The rise in inflation mostly reflects the strong pressures coming from the external environment coupled with an increasing contribution from the domestic one. Inflation is expected to remain high in the fourth quarter of the current year, but progressively reduce during 2023, and return to the target in the second quarter of 2024. The ongoing normalisation process of monetary policy stance conditions this projection. In addition, it factorises our expectations for stabilised prices in international markets and further expanded economic activity in Albania. In compliance with price stability objective, the Supervisory Council decided to raise the policy rate by 0.5 percentage point, to 2.75% from 2.25%. The normalising cycle of monetary policy stance will continue in the coming future. The normalisation speed, in any case, will be data-dependent and sufficient to safeguard our medium-term inflation target.